Jill Cataldo: What happens after you use coupons?

SuperCouponingJill Cataldo

March 3, 2013 12:01 AM

SuperCouponingJill Cataldo

March 3, 2013 12:01 AM

Dear Jill: You recently wrote about stores getting reimbursed by the manufacturer. As a longtime coupon user, it's interesting to learn about couponing from the store and manufacturer's ends. I am very interested in how this reimbursement works. Do the stores hire people to submit coupons to each manufacturer? How many people do this per store? How often do they submit? Consumers never see this behind-the-scenes process and I'm very interested. -- Kaori B.

Consumers don't often get to peek behind the curtain of how coupon redemption actually works. We cut our coupons, hand them to the cashier, enjoy saving some money on what we're buying and then, what happens next?

If you've ever looked at the fine print on a manufacturer's coupon, you might have noticed that there's a physical mailing address. Your coupons can be sent back to the manufacturer and the manufacturer will reimburse the store for the value of the coupons.

But does someone really sort through the thousands of coupons a store receives each week and mail them to each individual manufacturer? Usually not. This would be a labor-intensive process that would require the store to devote staff to sorting and redeeming coupons on an ongoing basis. Instead, most stores use the help of a coupon clearinghouse or redemption center.

Stores collect their coupons and box them up. If the store is part of a chain, each individual store might send its coupons to the store's corporate office first, which combines each of the stores' coupons together into a larger shipment. Then, the coupons are sent to the clearinghouse.

At the clearinghouse, the store's coupons are sorted by manufacturer and product. This is usually done via an automated system that utilizes both digital scanners and conveyor belts. Once the clearinghouse has sorted and scanned the coupons, they total up the value of the money due to the store from each manufacturer.

At that point, the clearinghouse sends an invoice to each manufacturer for the value of the coupons that is owed to the store. Then, depending on the clearinghouse and its arrangement with the store, the clearinghouse will pay the store for the value of the coupons, or each manufacturer can send payment directly to the store for the value of that batch of coupons.

If the manufacturer believes the totals being submitted are not correct, they can request an audit. Then the store must provide proof that they had and sold the quantities or volume of items that coupons were being redeemed for. (Years ago, a common form of coupon fraud was "clipping rooms" where less scrupulous stores would clip unused coupons from leftover newspaper inserts, and then submit them for redemption.)

Along the way, if there are any counterfeit or fraudulent coupons, they are pulled from the line and not reimbursed. These coupons are kept on file (in many cases for a year or more) at the clearinghouse and a fraud investigation may be opened. Photocopied coupons receive a similar treatment.